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This paper asks if there is deficiency of investment in people in Japan. To answer this question we examine comparative and historical data, as well as the reasons behind the data. We then look at public policies of recent administrations, particularly the Kishida administration, since one of its core policy agendas is 'investment in people'. We find that there is a deficiency of investment in people, by governments, companies and people themselves, for a variety of reasons, and that the Kishida administration has to date only proposed temporary measures without long term solutions. The paper concludes with policy implications and some proposals for additional action. [ABSTRACT FROM AUTHOR]

This paper discusses the 'new trinity' reform of labour markets proposed in 2023, which is an integral part of Japan's New Form of Capitalism. After providing an overview of the reform's three components – reskilling/upskilling, inter-company mobility, and job-based employment – it discusses how the reform may contribute to reduction of labour shortages, skill shortages, and inequality among workers. It then assesses challenges to this reform, ways to overcome these challenges, and how Japan may hold answers for other countries facing similar labour market problems. [ABSTRACT FROM AUTHOR]

Starting with a broad overview of the need for urgent action concerning climate change globally, this paper then reviews the evolution of environmental policy in Japan up to and including green transformation (GX) measures taken under the Kishida administration, and an assessment of the changes still needed to achieve sustainability in Japan. An integrated approach has been adopted in Japan, encompassing the environment, the economy, and society, to achieve three transitions: first, to a de-carbonized society; second, to a circular economy; and third, to a 'nature-positive', decentralized society which co-exists with nature. This approach was signalled in the Regional Circular and Ecological concept in the Fifth Environmental Basic Plan of 2018, building on extensive discussions within the Ministry of Environment and with other ministries from 2014, in the wake of the 2011 triple earthquake, tsunami and nuclear disasters. [ABSTRACT FROM AUTHOR]

Having a clear understanding of how leaders perceive their leadership behaviours and firms' situation is critical to help SMEs grasp their strengths and weaknesses. The current paper, therefore, aims to examine the perception towards leadership behaviours, innovation and organizational performance among Asian SMEs. SMEs in China, Japan, Vietnam and Thailand, responded to a survey that revealed their perceptions on four behaviours associated with Design Leadership, four levels of Workplace Innovation, and two types of organizational performance; Profitability and Growth. The analysis of variance was conducted to provide a complete picture of the comparison among the countries. The results revealed that there was a significant difference between Thailand and Japan, Vietnam and Japan, China and Japan on Design Leadership. With relations to Workplace Innovation, there was a negative variance of score between Vietnam and Thailand, and China and Thailand. Finally, significant differences were found amongst most of the countries on Profitability and Growth. The study would assist researchers in understanding how Asian SMEs perceive their leadership behaviours; stages of innovation, and assess their performance. With an accurate perception and understanding, it would lead to the creation of proper strategies and training programs that would contribute to the development of Asian SMEs. [ABSTRACT FROM AUTHOR]

Drawing on institutional theory, this paper discusses the transformation of verticalkeiretsuin the Japanese automotive industry from 1991 to 2011. By investigating the cases of Toyota, Nissan, and Honda, the paper empirically contributes to the debate on whither the Japanese economy is heading. Long-standing relationships to suppliers and exclusiveness have changed significantly in Nissan, while remaining stable in Toyota and Honda. New competition-based elements and more open support systems have been added to earlier governance mechanisms such as power andanshin(security). We argue that the studiedkeiretsusince the 1990s follows diverse and complex trajectories of hybridization, and we suggest that the Japanese economy is developing similarly. [ABSTRACT FROM PUBLISHER]

In the past, Japanese electronics firms have been known for following vertical integration strategies. Such strategies are consistent with Japanese managerial preferences, traditional relationships, and institutions in Japan. However, changes in the technological and competitive environment have resulted in increasing vertical specialization in the electronics industry outside of Japan. This paper examines whether and to what extent Japanese information technology and consumer electronics firms involved in active matrix Liquid Crystal Display production implemented and maintained integration strategies. While focusing on one industry, this paper aims to shed further light on changing attitudes and practices in Japanese management relating to strategy and internationalization. [ABSTRACT FROM PUBLISHER]

Research on the internationalization of multinational corporations (MNCs) is mostly built on studies of North American and European firms. East Asian MNCs have been studied less, and commonly with reference to theories developed in Western countries. In this paper, we query the validity of these ‘Western’ internationalization models for East Asian firms through comparative case studies of representative Japanese and South Korean MNCs’ expansion into China. We find that the internationalization processes of leading East Asian MNCs match the predictions made by Western theories only partially. Furthermore, we find considerable differences between the internationalization of Japanese and South Korean firms, indicating both that East Asian MNCs follow diverse patterns of internationalization and that established Western models of internationalization evince limitations or weaknesses when applied to East Asian firms. Overall, the findings of this exploratory study illustrate the need for further, in-depth studies on the internationalization of East Asian MNCs which may result in the extensions of existing theories or even new theoretical frameworks. [ABSTRACT FROM AUTHOR]

This study examines the role of national and organizational culture in alliance management in the context of three prominent joint ventures between India and Japan, which reached diverse alliance outcomes. It uses the case study method as a tool for an initial rich exploratory analysis (Yin 2013) of alliance management capabilities that may later be tested on a larger dataset. The study finds thatnational and organizational cultureis both important factors of alliance management capability. It highlights the specific role oftrust, consensus in decision-making, communication and relationship building as key constituents of alliance management capability.This paper thus contributes to an important strand of literature on alliance management in the context of two important Asian players from the developed and emerging markets. Its focus on cultural factors as determinants of alliance management helps to establish a managerial blueprint leading to positive alliance outcomes for such ventures in future and to establish a roadmap for increased interaction between India and Japan. [ABSTRACT FROM PUBLISHER]

Japanese firms are renowned for being change-averse, even after financial crises. On the basis of a case study of Shinsei Bank, a highly symbolic example of radical attempted change, this paper explores the difficulties of reconciling two very different socio-economic models – Japanese and American. An interview-based study of current and former Shinsei bankers suggests that Japan's ‘refusal to change’ is more to do with understandable employee reactions rather than a problematic strategic ‘dysfunction’. While perhaps an extreme example, the Shinsei case highlights how difficult it is to see beyond a scenario of measured and evolutionary change in Japan after the global financial crisis. [ABSTRACT FROM AUTHOR]

As widely documented in academic literature, family businesses perform better and enjoy a sounder financial structure than non-family businesses, a trend that applies to Japan as well, which is the context of this paper. Therefore, conventional wisdom suggests that family businesses should recover better or more easily from an economic downturn and persist in their stronger performance. This study tests this hypothesis, especially in reference to the current global economic crisis, by drawing lessons from the Asian crisis of 1997, for which relevant data are available. The study pertains specifically to the case of Japanese family and non-family companies. The empirical investigation uses a matched pair methodology, which allows for strong controls of size and industry variables. The sample consists of 98 carefully selected pairs (one family and one non-family) of firms that are of the same size and from the same industry. According to the results, family businesses achieve stronger resilience both during and after an economic crisis, compared with non-family businesses. They resist the downturn better, recover faster, and continue exhibiting higher performance and stronger financial structures over time. [ABSTRACT FROM AUTHOR]

In the 1990s, Japanese semiconductor manufacturers lost international competitiveness, failing to maintain their technological leadership. Their innovative dynamics in the old techno-governance structure based on vertical intra- and inter-firm cooperation faced limitations; they became entrapped in a DRAM-based technological trajectory. Faced by disrupting contingencies, how did they change relations with firm- and technology-related actors in ways sufficient to develop a new techno-governance structure? Through their micro-level strategies they shifted from vertical intra- and inter-firm relations to horizontal ones, while through their macro-level strategies they developed coordinating mechanisms with technology-related actors in order to consolidate innovative capability for developing the system LSI. These strategies resulted in a complex mix of modularized-product-based competition and cooperation in addition to reviving collective projects, some running even without government subsidy. Such developments, though characterized as new, remain an extension of the Japanese institutional inheritance; namely, an emphasis on a strategic mix of cooperation and competition, but with a revised understanding of cooperation. Thus, this paper analyzes how institutions restrict innovative dynamics through techno-governance structure, while they also transform path-dependently as actors struggle to develop a new structure to cope with threatening contingencies. [ABSTRACT FROM AUTHOR]

The Japanese innovation system is said to possess distinct weaknesses. One indicator is that in most new key industries, Japan is underrepresented on the world market. Given Japan's success until the beginning of the 1990s, this development was quite unexpected and has induced comprehensive reforms of the Japanese innovation system. Apparently, those institutions that were responsible for the economic success of the 1980s now hinder Japan's ability to adapt to and create new industries. This paper argues that while some reforms of the Japanese innovation system may be necessary, a paradigm change is not. Mainly one argument is provided for a more optimistic stance towards the sustainability of Japan's competitiveness: the plasticity of innovation systems. With reference to one new and 'cool' industry, the Japanese game software sector, the relevance of the concept of plasticity is illustrated. [ABSTRACT FROM AUTHOR]

University Spin-offs (USOs) have increasingly been sought after as a means of innovation breakthrough in Japanese academic society. To support their success, various financing options have been provided in their seed/early stages from institutional venture capital, governments and corporations. Non-financial support, however, is often limited in their early development stage when such support is most critical. This study reveals a 'gap' between the needs of Japanese USOs for non-financial support and the capacity of existing investors to supply such support. It argues that business angels in Japan, possessing similar characteristics and investment profiles to those in the USA, could play a critical role in filling such a gap and so better direct Japanese USOs to success. This paper concludes with the suggestion that an organizational approach towards matching universities and business angels is appropriate in the still traditional Japanese society. [ABSTRACT FROM AUTHOR]

This paper explores certain characteristics of Japanese professional business services (PBS). The aim is to develop an analytical typology consisting of the three dimensions - organizational linkage, service market, and competitive situation - for analysing the obtained empirical data. This typology has been developed in order to increase the understanding of how Japanese companies operate within this sector and also to examine the reasons behind the fact that Japanese business services seem to be marginalized in an international context. This typology could serve as a theoretical frame for comparing Japanese companies with western companies in future research. This research is based on empirical material collected in Japan in the spring of 2001, covering research institutes, general trading houses and insurance companies. Using the constructed analytical typology, the findings reveal that strong organizational linkages have generated a business service market where diversification of service supply within companies is common. However, there are strong indications of a changing business environment with increased competition and further specialization among business service firms. Furthermore, the findings indicate that Japanese companies have difficulties competing with highly-specialized and reputable western business service firms. [ABSTRACT FROM AUTHOR]

This study presents a theoretical model of interaction between individual and collective levels of entrepreneurial learning. We conducted a qualitative study on SoftBank Academia (SBA), an institute for human resource development to develop potential successors to Masayoshi Son, the founder of SoftBank Group in Japan. In SBA, there's simultaneously a high level of competition and cooperation. Results suggest that the entrepreneurial learning process, which spans individual and collective levels, features elements of SoftBank Group's business process such as 'comradely association' and 'Cluster of No. 1 Strategy'. [ABSTRACT FROM AUTHOR]

This study uses a quantitative analysis to investigate the connection between the talent management (TM) mechanism and work engagement with a perceived moderating effect of the self-perceived talent status on work engagement. Using responses from 471 respondents in six Japanese firms, I propose and test hypotheses regarding the TM mechanism, work engagement and the moderating role of the self-perceived talent status between the TM mechanism and work engagement. The results demonstrate that the TM mechanism and the self-perceived talent status have mutually exclusive and positive effects on work engagement. This finding corroborates the previous studies that employed exclusive and inclusive approaches. However, this study failed to find any concrete evidence that supports the moderating role of the self-perceived talent status. [ABSTRACT FROM AUTHOR]

This study examines the relationship between home-country firm concentration and investment location decision, using data from a sample of Japanese subsidiaries established in the US between 2003 and 2017. Results show that when Japanese firms consider locating operations in the US, they give priority to states where other Japanese firms are already established, over any other firm- or location-specific determinants. Furthermore, industry concentration exerts a moderating effect on the co-national bandwagon effect under study, suggesting that the social network of established Japanese firms becomes a deciding factor in the absence of other attractive economic attributes. [ABSTRACT FROM AUTHOR]

We investigate the impact of host-country risk on the expatriation strategies of multinational firms, using data on Japanese subsidiary firms in manufacturing industries in 13 host countries in Asia. We find that country risk is negatively correlated with the degree of expatriation and that, rather than host-country risk, firm-specific factors (particularly capital intensity, ownership share of parent firms in subsidiaries and the age of the venture) explain most of the variation in the degree to which subsidiaries rely on Japanese expatriates. Contrary to previous studies, the capital intensity of production is a key explanatory firm-specific variable that correlates positively with the degree of expatriation. Japanese multinational companies do not rely on expatria127=tes to off-set host-country risk, but to mitigate risk to parent investment in subsidiaries. [ABSTRACT FROM PUBLISHER]

This contribution attempts to examine the relative importance of the US, Japan and China to Hong Kong and Macau, two effective dollar-based currency boards today, by evaluating the economic potentiality of Japan or China as an alternative monetary anchor country against the US. The assessment is made according to the criteria prescribed by the optimum currency areas (OCA) theory. In addition to that, a subsidiary analysis is done to evaluate in general the suitability of their fixed exchange rate regimes, regardless of the anchor country. Amidst the existing dollar linked arrangement and the rising dominance of China, significant evidence suggests that Japan, despite its lacklustre domestic conditions, might be at least as good a monetary anchor as the US for Hong Kong. In the meantime, China seems to be a more promising monetary anchor alternative for Macau. The features of Hong Kong and Macau also appear to broadly and endogenously support their fixed exchange rates, but not all the features of Macau, a HK-dollar-based currency board, are consistently symmetrical with those of Hong Kong. [ABSTRACT FROM AUTHOR]

Between 1998–2006, Japan's political economy underwent a strategic inflection point, anchored on legal changes so profound that they are irreversible. These reforms sought to enable large companies to shift from the post-war priority on sales and market share toward a new focus on profitability. The arrival of powerful low-cost Asian competitors in assembled goods, and a drastic change in the shareholder structure in Japan brought the end of the ‘developmental state’ approach and necessitated repositioning into innovative, high-margin sectors. The congruence model posits that a successful shift in critical tasks requires a realignment of formal organization, people and culture. For Japan's highly diversified companies, to compete as efficient innovators meant making clear choices what businesses to compete in, and then to restructure to focus on winning in those few businesses. For Japan as a country, the shift in formal organization came through a wholesale change in the underlying approach to law-making and regulation, as well as corporate law. The 1990s were not so much a ‘lost decade’ for Japan as one of renewal and repositioning. [ABSTRACT FROM PUBLISHER]

Japan, inadvertently, has become the outstanding forerunner in a new set of global developments that can be described under the three headings of deflation, downsizing, and demography. New ‘lessons from Japan’ are to be discovered here, and these are not only admonitory ones. Far from it, for recent Japanese practice exemplifies the new ‘choose and focus’ strategies that can make an era of general, quantitative business slowdown into one of remarkable sectoral and qualitative development. The implications touch upon wide domains of activity, particularly strategic planning and finance. This introduction surveys some relevant and under-appreciated features of this recent history, in order to understand and project a few main lines of present and near-future developments in connection with the contributions that make up this special issue. [ABSTRACT FROM PUBLISHER]

This study examines the dynamics of the development of Japan's notorious ‘lost decade’ from 1990–2003. This economic downturn marked the end of four decades of strong economic growth and is still affecting the Japanese economy today. While previous studies have focused on government policies to explain the nation's slow response to this crisis, the attitudes of the Japanese business community merit more attention. For example, the leaders of Keidanren, the powerful representative of big business in Japan, defined a set of economic challenges facing Japan in the late 1980s and neoliberal solutions that blinded them to the significance of the economic bubble that developed at that time and its subsequent collapse. Since then, Keidanren's prescriptions for reviving the Japanese economy have remained essentially the same. [ABSTRACT FROM PUBLISHER]

Characterized by a high level of R&D expenditure, pharmaceutical firms are also subject to specific risks that are reflected in their financial policies. In contrast to other firms, whose investments are directly related to internal cash flows, Japanese pharmaceutical companies do not appear to rely on this source of funds to undertake R&D investments. Our analysis reveals that R&D expenses largely depend on the firm's size and the strength of its balance sheet. More precisely, high levels of debt appear to hold back R&D expenditure, especially when debt has a short-term maturity. These results highlight the importance of funding risky investments with the adequate type of capital to avoid putting firms in financial distress. Despite the risk, R&D investments seem to be justified by the fact that they are generally associated with higher sales growth. However, the difficult conditions prevailing in Japan's pharmaceutical industry make these benefits less visible. [ABSTRACT FROM AUTHOR]

This study examined the relative influence of transformational and gatekeeping leadership on team performance in a study of researchers working in industrial R&D teams in Japan. Potential effects of both internal and external communication and group norms for consensus were studied as possible mediating influences on the leadership-performance relationship. Results found that, while both forms of leadership enhanced communication processes within and between groups, only gatekeeping leadership served to reduce group norms for consensus. As a result, team cultures became somewhat more accepting of expressions of divergent opinions and new ideas from various team members, an important factor in R&D innovation and performance. By contrast, transformational leadership served to create team cultures in which divergence from group norms by various members was discouraged, leading to fewer innovative ideas and no performance increment. Results are discussed both in the context of the unique Japanese work environment and in the larger context of leadership processes across regions and cultures. [ABSTRACT FROM AUTHOR]

This study takes a broader view of internationalization in retailing within the context of the cross-border transfer of business models based on the case of Seven-Eleven Japan Co. Ltd. The authors acknowledge that it is imperative to take a broader process based view of internationalization in a continually consumer driven global economy, with increasing convergence of information and communication technologies which enable effective management of large networked retail firms. Such a process based view of internationalization has implications through all the stages in the core value chain of the retailer, from sourcing through to logistics, store operations, property management to customer relationships. The research demonstrates how the internationalization of Seven-Eleven Japan Co. Ltd entailed across-the-board continuous adaptation covering all three systems of retail store formats and operating systems, product development and procurement, and supply chains. Accordingly, the study makes a contribution to the standardization versus localization debate in internationalization literature by applying the concept of 'continuous creative adaptation' to the case study. [ABSTRACT FROM AUTHOR]

Japanese public authorities are concerned that Japanese industry is losing its competitive advantage in high technology industries. Moreover, there is a strong concern about the hollowing out of the local industrial basis during a period where the population is ageing and there is a need for the development of new fiscal resources locally. Public authorities still count on large companies to be the main source of innovation. However, the economic model of innovation and product development has reached its limit. For the first time since the 1950s there is a strong belief that innovative start-ups in manufacturing industries and/or having R&D activities that can lead to possession of high value patents need to play an important role in the industrial structure. The perception exists that Japan lost its competitiveness with the USA (and is likely to have similar problems also with China and India in the coming years) precisely because it had fallen behind in terms of creating the type of R&D-oriented companies that would create knowledge-intensive employment, develop global branding strategies and manage efficiently tangible and intangible assets. In this context, national and regional universities are expected to play an active role as providers of knowledge and technologies in collaboration with public administration and business. This could be achieved as usual through traditional means such as technology transfers together with commissioned and common research for and with private companies. However, since the beginning of the 2000s, university spin-offs (USOs) are beginning to play an increasingly significant role in the revival of Japanese economy in terms of attracting venture capital and promoting innovation. This article will describe and analyze the situation of the university spin-offs in Japan: the importance and origin of the phenomenon, and the characteristics and performance of those spin-offs. It will identify the obstacles they encounter and the opportunities they have in the current Japanese business environment, and assess the impact of the public policy supporting them. Finally, it will propose a possible scenario of their evolution in view of the domestic and international changes in the business environment. [ABSTRACT FROM AUTHOR]

The studies presented in this collection have outlined some of the significant and emerging changes in the patterns of innovation in Japan, illustrating with examples from across diverse industries and business sectors, and developing arguments from a number of internal and external perspectives. This concluding contribution highlights aspects of the human dimension informing the enduring myths and emerging patterns of innovation in Japan. It develops from the premise that innovation as a managed process proceeds - and succeeds or fails - through consideration of the individual and collective efforts of people. The people in this case are Japanese; the focus is on how they interact as employees, as managers, as inventors and as entrepreneurs. The emphasis is on how their combined efforts and imagination serve to shape what management scholars and business analysts describe as the emerging and enduring 'national innovation system' of Japan. [ABSTRACT FROM AUTHOR]

Japan's innovation system is often characterized as one dominated by in-house research and development (R&D) by large firms, but recently, more and more firms are involved in R&D collaborations due to the vigorous international innovation competitions and the increasing complexity of R&D. This study examines the role of small and medium sized enterprises (SMEs) in this change, by performing quantitative analyses using RIETI's R&D External Collaboration Survey. First, it is found that SMEs have gained high R&D productivity through university industry collaborations (UICs). Absorptive capacity theory suggests large firms with internal R&D resources are good at UIC activities as well. However a growing trend of UICs is found in small firms or new technology-based firms (NTBFs), which focus on focused R&D such as specific product development projects. Furthermore, these types of small firms play an important role as partners of large firms' R&D collaborations. For large enterprises that are increasingly selecting and focusing on areas of in-house R&D, there is a great incentive to collaborate with NTBFs with unique technologies. In this sense, NTBFs play a central role in changing Japan's national innovation system from an in-house system to a network based one. Policy implications for accelerating this change are also discussed. [ABSTRACT FROM AUTHOR]

What jump-starts technology commercialization, venture capital investment, and new firm formation in new technology industries? What are the most effective ways to encourage start-ups and to connect fledgling firms to critical resources? National policies targeting life science (for example, biotechnology and medical devices) in Japan and the USA are compared in the context of their national innovation systems (NIS) supporting (and hindering) new technology-based entrepreneurship as a whole. Japan has embarked on an unprecedented bet on the future potential of life science, investing nationally and locally in building up R&D and commercialization infrastructure and stimulating new business creation through its Cluster Initiative and other policies. At the same time, while the USA until now has been at the forefront in new technology entrepreneurship, national policy is currently faltering. Through an analysis of best practices in national and regional innovation systems one can get a sense of important push (for example, policy stimuli), pull (market demand), drag (capital and institutional weaknesses) and jump (targeted community-level strategies) factors underlying the ability of certain locales and countries to create competitive advantages in new technology industries. [ABSTRACT FROM AUTHOR]

The innovation management of Japanese and Korean firms is analysed from a comparative perspective. A review of aggregated statistical data reveals that corporate research and development (R&D) in Korea is concentrated to a higher extent on a smaller number of firms and industries than in Japan. A broad analysis by managerial field shows that high investment into the development of new technologies and the adoption of advanced R&D management practices are common among Japanese and Korean firms. At the same time, however, various differences set them apart. Japanese firms tend to be conservative and Korean firms tend to be risk taking in their technology strategies. Korean firms rely to a higher extent on external technology from overseas than Japanese firms. Japanese firms focus on the early involvement of suppliers in R&D activities, whereas early design activities have a high priority in Korean firms. Finally, the transition from stable, seniority oriented towards flexible and performance oriented human resource management in innovation-related areas is more rapid in Korea than in Japan. [ABSTRACT FROM AUTHOR]

Japan is inventing its way out of economic inertia that has existed for at least a decade. It is making some of the most radical changes in history to its assessment of valuing intangible assets and changing its attitudes to litigation. The speed of change in the field of intellectual property (IP) is occurring at a furious pace and in some cases surpassing that in western countries. Recent landmark decisions concerning employees' rights to invention, which have resulted in large payouts by Japanese companies to their former inventors, all point to change propelled by the need to be globally competitive. Because of these changes, there is a determination to make proceedings for those wishing to patent and license in Japan less cumbersome and to defend the patents of Japanese companies. This has been achieved by the introduction in 2005 of a bespoke patent court and a series of groups and associations that Japanese companies can join in order to collaborate in monitoring IP infringements among their East Asian neighbours. The recent decisions on employees' rights to compensation made in the Japanese courts coupled with patent examination acceleration is encouraging increased activity by Japanese inventors making Japan globally competitive economically. [ABSTRACT FROM AUTHOR]

This article considers power inequality in the context of cross-cultural organizational learning. A qualitative study of five Japanese subsidiaries operating in the People's Republic of China revealed that the Japanese had invested considerable effort into replicating and reinforcing the corporate values, norms, policies and collective learning practices from their home country. Through control of organizational resources and through all-embracing culture transformation programmes, they had leveraged their dominant power to standardize the social construction of collective learning processes and impose these upon the local Chinese. It is noted that these programmes raise the spectre of de-culturalization, namely, removal of Chinese identity and cloning of Japanese identity, and pass opportunities to implement alternative programmes based on libertarian education philosophies that could drive a bilaterally negotiated approach to cross-cultural integration. [ABSTRACT FROM AUTHOR]